Published: November 11, 2009

Based on my forecast data and how the market is conforming to that forecast, it looks like a Bullish trend is now developing.  My trend forecast software model indicates this trend should continue in the coming weeks.  However, my projection models strongly suggest we'll see a massive sell-off in the stock market in 2010.  As we get closer to that date, I will keep you updated on the timing.

For now, I am moving my client accounts back to about 60% invested and 40% cash.  Assuming market conditions remain positive, I will increase my percentage invested to 100% over the next couple of weeks.

I've reserved my top-ranked trades for my premium service, Mastering the Markets.  In that premium, fee-paid newsletter, which I sent out yesterday, I presented my readers with 15 high-quality "Doublers" picks -- 15 securities that my data systems are telling me have the least resistance to doubling in price in the coming months.  I then selected the three top-ranked securities from this list to trade in yesterday's issue.

One of these top picks is the world's leading producer of an exceedingly rare chemical element that many of the world's leading power producers absolutely must purchase in order to stay in business.  Its shares have already surged +119.8% off their March lows, and my data systems are telling me that the uptrend is likely to continue in the coming months.  Meanwhile, one of my other top trades is a leading Canadian trust that saw its shares jump +5.61% yesterday alone.  To gain immediate access to these trades, click here to learn more about Mastering the Markets.

In the meantime, this week's "Trade of the Week" comes from the pharmaceutical sector.  Abbott Laboratories (NYSE: ABT, $52.35) is one of the world's leading providers of health care products.  It isn't often that my proprietary data system flashes such a "Strong Buy" as it has this week for Abbott Labs.

ABT's fundamentals are excellent. Remember: I use fundamentals to find the best stocks to consider buying. Meanwhile, I use technicals to tell me when to buy. I cover this concept in Rule #1 of my 10 Essential Rules. (Visit this link to view a full video briefing on all 10 rules.)

The following fundamentals make ABT an attractive trade:

• The firm's earnings jumped +16.5% in the most recent quarter.



• ABT has one of the strongest drug portfolios in the business, with only one major patent due for expiration in the near term. The company also benefits from a diverse revenue stream, as only 60% of sales come from pharmaceuticals.



• ABT pays a solid dividend yield of 3.0%.

• The industry (Major Drugs) is in Bull-Mode and the sector (Healthcare) is just about to move back into Bull-Mode. Since 50% or more of a stock's price is tied to the movement of its sector and industry, this is another strong indication that shares of ABT could move higher.
  
  
• I divide each security's trading range during the last three years into four Zones. (If you look closely, you can see each of these Zones labeled in gray text in the center of the chart above.) ABT is in trading in Zone 3, and the stock is on a laser-like trajectory toward Zone 4. This is a very bullish sign.
  
  
• ABT has shown some decent insider buying in the past year. I always like to see insider buying, as it indicates the people who know the most about the company might believe the stock is undervalued.

Action to Take: Based on the analysis above, I believe ABT is a good trade to put on now with the following trading parameters:

• Buy ABT with a limit order at $52.50 (Good for the Week)


• Set an initial stop loss at $48.48


• Target price = $58.00

Potential Profit = +10.5%

-- Mike Turner
Editor
Mastering the Markets, Trade of the Week